Five Ways Automation Will Change Your Concession Management

3 min readBy Siobhan Boyle: 12 March 2019

With access to a steady stream of travellers who have little else to do during their transit but peruse the available concessions, retail within the terminal has proven to be a lucrative revenue stream for airports. Globally, it is the most robustly performing non-aeronautical revenue sector, contributing 28% of all non-aeronautical income.

But are airports taking full advantage of this potential cash flow? By gaining a deeper, more detailed understanding of passenger movement and spending habits, airports could see significant growth in this area. It all comes down to data, but a surprising number of airports still rely on manual information-gathering processes that are hampering this growth.

Traditionally, airports worked with a few key duty-free providers and restaurants. Commercial teams got by just fine by collecting the rent, maintaining excel spreadsheets of sales data and billing stores monthly for their take of the percentage of sales. But as airport retail footprints have grown and the complexity of concessionaire agreements increase, taking a manual approach has become unwieldy.

The solution lies in finding the right automated systems. Advances in passenger data collection and analysis technology hold the key to unlocking enhanced shopping experiences that lead to increased spend.

Here are five good reasons you should consider moving to an automated approach.

1. Stop losing money on contract negotiations

Storing concession contracts, sales data and tenancy information across multiple spreadsheets and databases puts your commercial team at a disadvantage. Manual processes are more prone to errors, which result in revenue loss. Most airport commercial teams want to be confident in the accuracy of their data, and automated concession management that streamlines reporting and billing procedures makes this more easily achievable.

With a consolidated view of all concessions and revenue streams, right down to transactional data of each sale, it’s much easier to spot opportunities for growing revenue during contract negotiations.

2. Improve your margins

Most concessionaires will submit reports by email, resulting in a considerable amount of time spent collecting, analysing and storing data. Delayed submissions, time wasted chasing manual reports, and escalating collection costs all mean eroded margins.

Why not incentivise automated data sharing by providing concessions with the right data and tools to grow their own business?

3. Improved cash flow

Manual data processes take time – it’s a simple fact. Without a unified view of each retailer, or an automated means of data capture, the latency between sale and recognition can take weeks. This impacts not only cash flow, but also an airport’s ability to flex to a changing operational or retail environment.

Immediate access to data can therefore quickly improve cash flow for both the retailer and the airport.

4. Reduced audit costs

Bullet-proof reporting based on actual sales data is every commercial manager’s dream. But is it a reality? Creating sales reports manually is cumbersome and picking through the data can have a massive impact on the length and cost of audits. In contrast, automated reporting is more accurate; it also happens much faster and reduces the time (and therefore money) spent on audits.

5. New growth opportunities

Odds are that without automated data capture, the information you have access to probably focuses on sales totals, and is lacking in insight. With limited detail behind sales, it’s often a best guess, when creating pricing strategies and product promotions.

How can airports be sure that they are introducing new food and beverage options in the right locations or attracting the right type of concessions? With this knowledge, you could dramatically improve retail spend.

With high investment often required, airports are keen to make the right decisions, and precise revenue insight is vital. After all, real commercial growth lies in increasing revenue per passenger and not just relying on growth from rising passenger numbers or airline fees.

Kick start your retail revenue revival with intelligent automation

Leading airports are increasingly turning to concessionaire management tools to automate the collection and analysis of sales data. Not only do these tools capture data from a multitude of sources, and accurately calculate revenue per transaction, they also make it easy for airports to analyse and act upon the data they’re capturing to boost sales.

By capturing all transaction data, not just sales totals, airports and their concessionaires gain a clear understanding of purchasing behaviour. By combining this data with flight and flow analysis, they can help with anything from product placement to performance benchmarking and even adapting flight allocations to maximise spend per flight.

Analytics is fast becoming one of the key tools in the commercial manager’s toolset, helping you plan for the long term, predict what short-term adjustments will yield most benefit and perfect your retail strategy.

The new age of intelligent automation and predictive insight begins now.

Not sure how to go about improving your concession management processes? Get in touch with our team of experts and we'll guide you towards maximising your non-aero revenue potential.